By Silvera Food
Monday, March 2 2020, 6:00 AM (GMT+7)
After 3 continuous years of growth with the golden peak in 2018, the export value of pangasius in 2019 fell by 11% and reached only 2 billion US dollars. This reduction was predictable because after the booming sales of pangasius in 2018, there was this over farming and oversupply of raw material causing the decreased export price to most of the import markets in 2019.
The price of pangasius was expected to bounce back in 2020 after its deep sink in 2019. Yet, the big hit of coronavirus at the beginning of 2020 has slowed down the consumption of not only pangasius but also many other products and businesses around the globe. The export of pangasius to China has dropped up to 50% during the 2 first months of 2020 according to VASEP (Vietnam Association of Seafood Exporters and Producers). This sharp drop is caused by the decreasing number of people going out to shop in supermarkets or dine at restaurants. Those companies relying heavily on the Chinese market are suffering a difficult time moving their products.
Gates remain open
However, amid such a hard situation, there are still opportunities for pangasius companies in Vietnam.
Firstly, while traditional shopping malls, markets and restaurants have seen a decline, Ecommerce platforms are what thrives. Online shopping and food ordering are the optimal solution during this virus spread because the demand for food, especially healthy food, always exists.
E-commerce Thrives Amid Covid-19. Credit: Scandiweb
At the same time, the EVFTA, which was officially ratified by European Parliament on February 12, 2020 and has been scheduled to be passed by National Assembly of Vietnam in May 2020, is expected to come into effect this July and will be bringing more opportunities to Vietnamese pangasius companies. In order to make use of these advantages, Vietnamese companies and enterprises should be well-prepared before the tariff on pangasius reduces to 0% within the next 3 years. The lack of white fish supplies to European markets due to the temporary shut down of Chinese factories also opens up some chances for Vietnamese pangasius products.
Last but not least, around the end of 2019, the Food Safety and Inspection Service (FSIS) under the United States Department of Agriculture officially recognized Vietnam’s Pangasius Food Safety Control System after more than three years of negotiations, affirming the production and quality control capacity for export of Vietnamese producers. The fact that Vietnamese pangasius was able to meet one of the strictest standards as said above enables the fish to be more easily accepted and welcomed not only in the US but also in other International markets.
Price is likely to raise in the 3rd and 4th quarters of 2020
It is recommended now that pangasius importers and buyers should stock up some more of the fish before its price increases again after the recovery of markets worldwide, especially China, from Coronavirus.
Pangasius Price Is Likely To Increase By 3rd Quarter Of 2020. Credit: Silvera Food
The reason of the possible price increase comes from three main reasons:
- The price of raw material (18,500 VND/ kg) has hit the bottom for months now. Despite the deceased sales and consumption worldwide, the fish has not got any lower in price. For those buyers keeping on waiting for a lower price, that day might not come as the current price is considered the lowest now.
- China is getting things under control and their activities is believed to resume soon. Their recovery will drag the demand for food supply, including pangasius, for workers in offices and countries and, therefore, the price of pangasius from Vietnam.
- Finally, due to the current low price for raw whole fish, many farmers have suffered from great losses and could not re-invest in their new fish breeding/ or breed a very small amount of young fish. Meanwhile, it takes roughly 8 months for the fish to be ready for harvest and this will lead to some short of fish material by 3rd quarter of 2020.